The Government's report shows that it has completed the transfer plan for the two compulsory purchase banks, CBBank and OceanBank.
Report of Government Regarding the implementation of the 2024 socio-economic development plan, the 2025 socio-economic development plan has updated the results of restructuring the credit institution
Accordingly, the Government said that it has completed the transfer plan for the two banks subject to compulsory purchase, namely Construction Bank Limited (CBBank) and Ocean Bank Limited (OceanBank); and is continuing to complete the transfer plan for the remaining two banks, Global Petroleum Commercial Bank Limited (GPBank) and DongA Commercial Joint Stock Bank (DongA Bank). Regarding Saigon Commercial Joint Stock Bank (SCB), the Government is considering and deciding on the restructuring policy.
The report also stated that handling weak credit institutions is associated with handling bad debt still slow, facing many difficulties and obstacles. The policy mechanism and financial resources to handle weak credit institutions in general and to develop a plan for compulsory transfer of compulsory-purchase banks and Dong A Bank in particular still have many shortcomings.
Regarding the handling of weak banks, at the regular online Government meeting in September 2024 with 63 localities held on October 7, Governor of the State Bank Nguyen Thi Hong The banking sector has also directed credit institutions to actively review their financial situation and prepare documents to organize the transfer ceremony of two zero-dong banks after a long period of difficulty. The State Bank is also directing units to quickly complete the remaining two banks to report to the Prime Minister.
Up to now, although not officially announced, market information shows that Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) will receive the transfer of CBBank, and Military Commercial Joint Stock Bank (MB) will receive OceanBank.
At the 2024 Vietcombank Annual General Meeting of Shareholders, Vietcombank Board of Directors member Do Viet Hung said that the transfer is expected to be carried out this year.
Vietcombank's leadership has not officially announced the identity of the bank that the bank will receive the mandatory transfer to, but CBBank's leadership has said that it will make a mandatory transfer to Vietcombank.
In fact, Vietcombank is currently also providing lending support and comprehensive support to CBBank, from changes in governance model, technology system, to product and service system and brand image... Sharing at this year's shareholders' meeting, Ms. Phung Nguyen Hai Yen - Deputy General Director of Vietcombank also said that since 2015, Vietcombank has provided technical support to CBBank. By 2022, Vietcombank had lent CBBank VND 10,000 billion; and in 2023, VND 6,700 billion. Vietcombank's leaders added that due to regulations, these debts are classified into group 5 (bad debts with the highest risk of recovery). However, in the first quarter of 2024, after the reversal, the balance of these debts has decreased to VND 1,000 billion.
Similarly, at MB's 2024 Annual General Meeting of Shareholders, MB General Director Pham Nhu Anh expected to complete the mandatory transfer of a bank in 2024 or 2025 to " open up new development space for MB, especially credit growth". - Mr. Anh expected.
In addition, MB Chairman - Luu Trung Thai said that the bank has submitted and completed all procedures from MB, is just waiting for approval results and is ready to receive the transfer.
Like Vietcombank, although the identity of the bank that was forced to transfer was not disclosed by MB, initial information was determined to be OceanBank. In fact, at many conferences on implementing OceanBank's business tasks, MB's top leaders, Mr. Luu Trung Thai and Mr. Pham Nhu Anh, both attended.
Speaking as a guest at the 2022 Conference, Mr. Luu Trung Thai said that cooperating with OceanBank is both a political task and an opportunity for MB. According to the roadmap of the State Bank that the Government has approved, MB will coordinate with OceanBank to check the data system and develop a plan to submit to the Government.
Regarding other contents of the Project on Restructuring the System of Credit Institutions in Association with Bad Debt Handling for the 2021-2025 Period, the Government's report added that there will be an increase in capital for the group of state-owned commercial banks and the issue of bad debt handling.
Accordingly, the group of state-owned commercial banks continues to play a leading role in the credit institution system in terms of capital scale, assets, capital mobilization and credit. Solutions to improve financial capacity and increase charter capital of state-owned commercial banks continue to be actively implemented. The competent authority has submitted the Plan for additional state capital investment at Vietcombank; completed the dossier for increasing charter capital for Vietcombank, BIDV, Vietinbank and Cooperative Bank; completed the procedures for transferring additional charter capital to Agribank according to the resolutions and decisions of the National Assembly and the Prime Minister.
Joint stock commercial banks focus on consolidating and comprehensively rectifying all aspects of finance, management and operations to improve business efficiency and competitiveness. Restructuring operations towards a safer and healthier direction, gradually reducing and limiting investment in potentially risky areas such as investment lending, securities trading, real estate, ending capital mobilization and lending in gold; actively developing payment services, other non-credit services and expanding retail services and consumer credit.
Regarding bad debt settlement, as of the end of June 2024, the on-balance sheet bad debt of the credit institution system was VND 795,500 billion, an increase of 5.77% compared to the end of 2023. The on-balance sheet bad debt ratio was at 4.56%. In the first 6 months of the year, the entire system handled VND 167,300 billion of bad debt, an increase of 45.6% compared to the same period in 2023.
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